Chapter 11 Business Policy Final

Which of the following types of groups is most susceptible to groupthink?

A cohesive group

Why must managers use a mechanistic structure to implement a cost-leadership strategy?

A mechanistic structure offers a centralized structure with well-defined lines of authority.

Which of the following statements about an organization's culture is NOT true? A. A positive culture motivates employees by appealing to high ideals. B. A strong monitoring and supervision mechanism is needed to enforce the culture. C. A positive culture encourages employees to make decisions not only with their heads but also with their hearts. D. Employees feel that they are part of a larger community by internalizing the firm's values and norms.

A strong monitoring and supervision mechanism is needed to enforce the culture.

________ refers to the degree to which ties are reinforced through indirect paths within a social network.

Centralization

The relationship between strategy and structure that directly impacts a firm's performance is _____.

Dynamic

Which of the following terms or phrases best characterizes Zappos' organizational structure?

Extremely Flat

Which of the following features helps match a cost leadership strategy to a functional structure?

Focus on economies of scale

Which of the following is a feature of an organic organization?

High span of control

Why does a firm use an organic organization combined with a functional structure when implementing a differentiation strategy? It allows the firm to constantly upgrade core competencies in R&D, innovation, and marketing.

It allows the firm to constantly upgrade core competencies in R&D, innovation, and marketing.

In which of the following ways does Zappos achieve organizational control?

It enforces that each group member's compensation depends in part on the group's overall productivity

Which of the following statements is true of the organizational culture?

It is better for founder CEOs to create a relevant culture, structure, and strategy in the ealry stages

Why is the optimal organizational structure a multidivisional structure?

Its focus is on driving down costs.

What was one of the reasons for Jerry Yang's failure at Yahoo?

Jerry's preference for obtaining consensus among his managers led to bickering and infighting

Cup N Cone Inc., a graphic design firm, has offices in New York, Texas, California, New Mexico, and New Jersey. Each of these offices is headed by a president who reports directly to Marvin Grey, the CEO. The heads of the centralized HR, Finance, and Marketing teams report to Marvin Grey as well. Managers in the various offices also report to the CEO directly. Based on this information, which of the following statements is most likely to be true? Marvin Grey has a wide span of control.

Marvin Grey has a wide span of control.

_____ define appropriate employee attitudes and behaviors

Norms

_____ describes the collectively shared values and norms of an organization's members

Organizational culture

Which of the following statements is true of strategy in an organization?

Organizational structure must follow strategy in order for firms to achieve superior performance

While working a night job at a call center, Neville creates an app called FastServe, which can be used to place orders at restaurants, rate the restaurants, and make reservations. Because he receives good responses for his app, he quits his current job to focus his efforts on FastServe. He creates a startup called TYOP and hires three people to help him improve FastServe and maintain the servers that run it. In this scenario, TYOP most likely has a _____ structure.

Simple

Which of the following real-world scenarios best exemplifies the use of organizational culture to build competitive advantage?

Southwest Airlines pilots sometimes help load baggage, which results in quick turnaround time

What is most likely to happen if a firm relies too long on a competency without honing, refining, and upgrading as the firm and the environment change?

The firm's culture can turn from a core competency into a core rigidity

How does W.L. Gore exemplify founder imprinting?

The four core values articulated by Bill Gore guide the company and its associates to this day.

Which of the following statements is true about the use of functional structures with various business strategies? The goal of a differentiation strategy is to create a competitive advantage by controlling costs.

The goal of a differentiation strategy is to create a competitive advantage by controlling costs.

Why are controls like budgets and operating procedures that McDonalds implements known as input controls

They are considered before employees make any decisions

Which of the following did management at Zappos do to reduce the level of formalization in their organization?

They avoided asking their customer service reps in call centers to follow a detailed script.

Which of the following is true of the process of organizing for competitive advantage?

To maintain competitive advantage, companies need to restructure as they grow and the competitive environment changes.

Which of the following statements about W.L. Gore & Associates best supports the fact that it is organized in an informal and decentralized manner?

W.L. Gore & Associates refers to its employees as associates rather than employees.

W.L. Gore has four product divisions: electronic products, industrial products, medical products, and fabrics division. It also has manufacturing facilities in U.S., China, Germany, Japan, and Scotland, and business activities in 30 countries across the globe. Based on this information, which of the following statements is most accurate? W.L. Gore is using a multidivisional structure.

W.L. Gore is using a multidivisional structure.

Gannett Company integrated certain important functions of USA Today.com with USA Today, while keeping other functions independent. To support this integration, the president of USA Today shifted compensation incentives for both senior teams to accomplish joint goals rather than to focus solely on each business unit's performance. This scenario best exemplifies a(n) _____. ambidextrous organization

ambidextrous organization

Elc Inc. is an electronic appliances manufacturer that has many strategic business units (SBUs), among which, Television and Computers share a close relationship. These SBUs have to fight each other for R&D funding because there is a combined amount set aside for these two units. However, they share technological findings with each other and work together to ensure that their combined output is better that of the other SBUs. Such a relationship between SBUs in a business is referred to as _____. co-opetition

co-opetition

GM's insistence on sticking to a bureaucratic culture combined with its M-form structure and its subsequent failure to adapt to changing customer preferences for more fuel-efficient cars, produce higher quality, and create innovative designs best exemplifies _____. core rigidity

core rigidity

Rast Inc. is an adhesive manufacturer. After a slight dip in production numbers, it forms a team to find a quick solution to this problem, at least for the shorter term. This scenario best exemplifies _____. exploitation

exploitation

A firm that uses a structure that is organized along different business functions such as HR, R&D, Sales, and Marketing and also along different geographical areas such as different countries of the world is most likely using a _____ structure. global matrix

global matrix

An organization that is organized according to strategic business units (SBUs) and also along organizational structures is most likely using a _____ structure.

matrix

When a firm diversifies into different product lines and geographies, a _____ structure is preferred.

multidivisional

Organizational culture can help a firm gain and sustain competitive advantage only if the culture makes a positive contribution to the firm's economic value creation and _____. obeys the VRIO principles

obeys the VRIO principles

An organization is characterized as having a flexible division of labor, distributed decision-making, and generalized knowledge of how to accomplish strategic goals valued. This organization is most likely _____ in nature. organic

organic

If a firm pursues only a differentiation strategy, it is most likely a(n) _____ organization. organic

organic

Zappos' 10 core values that define what it means for employees to be working at Zappos also define the _____ of Zappos.

organizational culture

Since an organic structure helps a firm build core competencies in areas such as R&D and marketing, this structure is employed by firms that: pursue a differentiation strategy at the business level.

pursue a differentiation strategy at the business level.

Florian just graduated from law school and wants to start his own law firm. It is best for Florian to use a _____ organizational structure. simple

simple

A high degree of formalization in an organization is most likely to _____

slow down decision-making

Organizational design is:

the process of creating, implementing, and modifying the structure of an organization.

Why is it difficult to imitate the organizational culture of firms like Southwest Airlines and Zappos?

their culture reflects complex relationships with their employees, customers, and suppliers

A company that is using extrinsic motivation as an output contol mechanism will most likely:

threaten to lay off employees if they do not achieve targets

Why did W.L. Gore reorganize itself into a functional structure from a simple structure?

A simple structure could not provide the effective division, coordination, and integration of work required to accommodate future growth.

Frappe operates as a strategic business unit (SBU) under More or Less Inc., a home-furnishings manufacturer. From this information, it may be reasonable to infer that: Frappe is led by its own CEO (or equivalent general manager).

Frappe is led by its own CEO (or equivalent general manager).

Which of the following organizational structures matches best with an international strategy?

Functional

Which of the following characteristics of McDonald's best supports the fact that it is a mechanistic organization? Its job descriptions are very descriptive.

Its job descriptions are very descriptive.

Which of the following best exemplifies the use of input controls

McDonalds use of standard operating procedures

Which of the following real-world scenarios best exemplifies formalization?

McDonalds use of standard operating procedures across the world

Remote Inc. is a notebook manufacturing company based in Ohio. Remote's main market is Ohio. It aims at providing its products at better prices than its competitors. Which of the following structures is Remote Inc. likely to use if it has functional setup?

Mechanistic

_____ organizations are characterized by a high degree of specialization and formalization, and tall hierarchies that rely on centralized decision making. Mechanistic

Mechanistic

Which of the following global strategies best matches with a multidivisional structure?

Multidomestic

What does strategy implementation often require changes within an organization?

Strategy implementation transforms strategy into actions and business models

W.L. Gore & Associates is organized in such a way that it has no formal job titles, job descriptions, or chains of command. This implies that it has: a decentralized structure.

a decentralized structure.

A funcitonal structure is recommended when a firm:

has a low level of diversification

Coda Inc. is an apparel manufacturer. The management at Coda prefers moderate control over the operations of the different departments such as R&D, design, marketing, and sales. It allocates a budget to each function at the beginning of each quarter. This is an example of implementing control through _____. input controls

input controls

Output controls can sometimes discourage collaboration among different strategic business units. However, more and more work requires creativity and innovation, especially in highly developed economies. One way firms are grappling with this issue is by: introducing results-only-work-environments to tap intrinsic motivations.

introducing results-only-work-environments to tap intrinsic motivations.

McDonald's operates Hamburger University that trains students to ensure consistent food quality across its outlets throughout the world. This indicates that McDonalds's: is mechanistic in nature.

is mechanistic in nature.

which of the following is an advantage of using a functional structure when pursuing a cost-leadership strategy?

it allows a cost leader to upgrade core competencies in manufacturing and logistics

Which of the following statements best describes groupthink?

it is a situation in which opinioins coalesce around a leader without individuals critically challenging and evaluating that leader's opinions and assumptions

Organizational culture can be the basis of a firm's copetitive advantage if _____

it is valuable, rare, and difficult to imitate

Black Mouse Inc., a web development firm, is headed by Rob Dennis, the CEO. Each functional department of the company—marketing, finance, and HR—has a president who reports to the CEO directly. Each department has various managers who manage teams. The managers report to the presidents and the team leads report to the managers. Finally, the employees at the lowest level report to their team leads. It is rare for a lower-level employee to interact with the CEO of the company. In this scenario, Black Mouse Inc. can be said to have a(n): tall hierarchical structure.

tall hierarchical structure.

Which of the following is true of W.L. Gore & Associates, which has a lattice organizational form?

All employees are empowered to speak to all other employees in the organization

Curve Inc. is a software development firm based in California. It strives to provide highly differentiated software at cheaper prices when compared to its competitors. Which of the following organizational designs should Curve Inc. implement to ensure the maximum success of its business strategies? Ambidextrous

Ambidextrous

W. L. Gore & Associates is the inventor of path-breaking new products such as breathable GORE-TEX fabrics, Glide dental floss, and Elixir guitar strings. Which of the following would be most likely to hinder its intention of fostering employee satisfaction, retention, and creativity?

An extremely formalized organizational structure

Flight Stream Inc., a toy manufacturing company, encourages its employees to enjoy their work by taking on additional responsibilities or switching jobs with each other. It allows its employees immense flexibility in charting their own career path within the organization. Chris has worked at Flight Stream for eight years but has never had a boss or supervised an employee. Which of the following is most likely true in this scenario? Flight Stream Inc. has a flat organizational structure.

Flight Stream Inc. has a flat organizational structure.

A typical college of business has several areas such as management, marketing, finance, accounting, MIS, and so on. This is an example of a(n) ______ structure.

Functional

To maintain its core competency of providing a superior customer experience in the face of explosive growth, Zappos split the organization into 10 standalone units. Which of the following does this scenario best illustrate?

How an organization accommodates strategy implementation through a flexible organizational structure

Why should managers using the M-form organizational structure to support a related-diversification strategy ideally concentrate decision making at the top of the organization? It allows a high level of integration.

It allows a high level of integration.

Which of the following is an advantage offered by a functional structure?

It allows for a higher degree of specialization and deeper domain expertise

Why does a functional structure rely on a flat organizational structure?

It allows for efficient bottom-up and top-down communication.

Why does Zappos offer its new recruits $2,000 to quit at the end of the first week of their job?

It believes that individuals who choose to stay on will fit in with the Zappos culture.

Which of the following is a disadvantage of a functional strategy?

It cannot effectively address a higher level of diversification

Opal, a recent fashion design school graduate, has received praise for her clothing designs from her peers and friends on social networking sites; this has inspired her to set up a store where she can design and sell apparel. After experiencing some success with sales, she recruits two employees to handle customers at the store. However, she handles other day-to-day affairs herself, while continuing to design clothes. Which of the following is likely to be a pitfall of this organizational structure established by Opal?

Once the firm starts growing and attracting more customers she is likely to feel overloaded

Fast Call Inc. is a pharmaceutical company that has many breakthroughs in medicine to its credit. Unlike many other pharmaceutical companies, Fast Call has a relaxed work environment where employees are free to discuss projects with each other. Employees are encouraged to choose the projects that interest them; communication between team members and their supervisors is open and easy. Because of the company's work culture, its employees feel motivated to work harder and display more entrepreneurial behaviors. In this scenario, Fast Call Inc. is most likely an organization that is _____.

Organic

_____ organizations have a low degree of specialization and formalization as well as a flat organizational structure

Organic

Which of the following types of organizations best helps match a differentiation strategy to a functional structure?

Organic Organization

Which of the following is an unintended side-effect of a high degree of specialization in an organization?

Reduced employee satisfaction due to repitition of tasks

_____ describes the degree to which a task is divided into seperate jobs.

Specialization

What most likely happens when a firm optimizes its organizational structure to its current situation?

it plants the seed of subsequent failure: the tightly coupled system can break apart when internal or external pressures occur

Which of the following is true of a functional structure?

it relies on a relatively flat organizational structure

Walmart is an example of a(n) _____ organization mechanistic

mechanistic

Kolt Inc., a large and successful retail chain on the West Coast, decides to expand its operations across the U.S. Which of the following organizational structures should Kolt Inc. use?

multidivisional

To effectively implement a differentiation strategy, managers rely on a functional structure that resembles an organization that is highly _____.

organic

Plow Inc. is a greeting card manufacturing company. Plow's market dominance exists primarily because of the innovative designs of its greeting cards when compared to those of its competitors. In this scenario, Plow Inc.'s managers must ideally rely on a functional structure that resembles a(n) _____. organic organization

organic organization

Employees learn about an organization's culture through the process of ______

socialization.

A firm's _______ determines how the work efforts of individuals and teams are orchestrated and how resources are distributed

structure

Zappos established its unique organizational culture"

through explicitly stated values that are connected to its reward system.

The most important yet least visable element of organizational culture is____

values